The business behind the show

Nielsen study shows there's a long road ahead to get people to pay for online content

February 16, 2010 | 11:57
am

Here's a shocker: When given the choice between paying for something or getting it for free, most people will choose free.

That's just one of the insightful findings from "Changing Models: A Global Perspective on Paying for Content Online," a new study from Nielsen. The research company interviewed almost 30,000 people around the globe about pay models for the Internet -- and if there's one thing the world is united on, it's that free is better.

This isn't news the media industry wants to hear. Nielsen says the free mentality is "strongest in developed countries with the largest populations of online veterans." In other words, the people with the money and the good broadband are going to be the toughest to convince to pay for content.

Nielsen's study doesn't really reveal anything that people can't figure out on their own. More than half of those surveyed are unwilling to pay even for theatrical movies online. No one is going to pay for amateur content. If there are lots of ads embedded in the content, that's also going to make people less reluctant to pay for it (there seems to be a disconnect with consumers who willingly shell out money for cable TV every month but want things for free on the Internet). Once content is purchased, consumers want to be able to copy or share it with anyone.

It's not all bad news. Almost 80% of those surveyed said if they subscribed to a newspaper, TV or radio service, they should be able to get its online content for free. This is a good sign for TV Everywhere, the initiative started by the cable industry that wants to make its content available online for free only to those who are subscribers to a cable TV service. Furthermore, one can take away the idea that if people want online content for free in return for paying for that content elsewhere, it will be easier to migrate those people to a Web-only business model.

It would be very easy to look at this study and say the odds of developing a pay business for online content are very long. But there's a roadmap to the future here. The survey says that almost 80% of respondents said that if content goes behind pay walls, they would not play ball, "taking it for granted they can find the same information elsewhere at no cost." Take care of that, and the dollars will follow. I know. Easier said than done.

Ultimately, getting people to open their wallets when they go online is going to be a long process. But people pay for water. They pay for cable and they pay $5 for a latte. Eventually getting them to pay for content that they would have to pay to see anywhere else doesn't seem like an insurmountable hurdle.